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You Borrow $10,000 from a Bank for One Year at a Nominal

Question 204

Multiple Choice

You borrow $10,000 from a bank for one year at a nominal interest rate of 5%.The CPI over that year rises from 180 to 200.What is the real interest rate you are paying?


A) 15%
B) 5%
C) -1.1%
D) -6.1%

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